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Our briefing for Monday, April 11, 2022:
Apr 11, 2022 3:18:49 PM
- In the United States, several cabinet members and House Speaker Nancy Pelosi have tested positive for Covid-19, as the virus sweeps through the Biden administration. After attending a dinner in Washington last week for politicians and journalists, a number of cabinet members and top aides reported being infected, including Commerce Secretary Gina Raimondo, Attorney General Merrick B. Garland, Valerie Biden Owens, the president’s sister, and Jamal Simmons, the communications director for Vice President Kamala Harris. Dr. Anthony Fauci, the president’s chief medical adviser said there are strong protocols in place to protect Biden, adding that the president has also had four shots.
- In Canada, the province of Quebec expects to see a rise in hospitalizations over the next two weeks; the province’s healthcare research institute predicts there could be as many as 265 admissions per day within that timeframe. Quebec’s interim public health director, Dr. Luc Boileau, said while hospitalizations are going to be high, they’re not expected to overwhelm the healthcare system. He urged caution among residents as the sixth wave appears to be underway. “We can’t forget the virus is present and the pandemic isn’t over,” Boileau said during a news conference Friday. “We’re seeing it. We all know someone who has recently contracted Covid-19 and some have even contracted Covid-19 again.”
- In the United Kingdom, the “Living with Covid” plans are being questioned by some experts, who say the government was too quick to lift restrictions in England. National Health Service Medical Director Stephen Powis says hospitals are under strain again, both because of the virus patients and the numbers of staff who are out sick. Britain’s official statistics agency reported that almost 5 million U.K. residents, or one in 13, had the virus in late March. "Blinding ourselves to this level of harm does not constitute living with a virus infection -- quite the opposite," said Stephen Griffin, a professor in medicine at the University of Leeds.
- India began to administer booster shots on Sunday, or what they call “precautionary” doses. The free third shots are limited to two priority groups – frontline healthcare workers and those aged 60 and older. All other residents wanting a precautionary dose will become eligible nine months after receiving their second shot – but they will have to pay for one at a privately-run facility. Unlike many other countries, where people have received a different vaccine as a booster dose, India is not allowing any mixing and matching. Of all vaccine doses administered in India, 82% are the AstraZeneca vaccine, made domestically and called Covishield.
- China continues to deal with the aftermath of lockdowns and strict Covid-19 policies, with the city of Shanghai discharging over 11,000 recovered virus patients on Sunday. Authorities insisted the patients be allowed to return home, even though lockdowns have restricted movement throughout the city. On Saturday, health authorities announced the restrictions would be lifted in areas with no new cases in the last 14 days, after another round of mass testing. The U.S. has expressed concern over China’s approach to Covid-19, and on Friday advised citizens to reconsider travel there due to “arbitrary enforcement of local laws and Covid-19 restrictions.”
- In Australia, Prime Minister Scott Morrison has called an election for May 21, with the Covid-19 pandemic likely being one of the major issues, in addition to climate change and the economy. Now seeking its fourth three-year term, Morrison’s conservative coalition government has been seen as largely successful at handling the Covid-19 pandemic and takes credit for the country having the third lowest death toll among the 38Organisation for Economic Co-operation and Development (OECD) countries. Although Australia is now one of the most vaccinated countries in the world, the opposition criticized the government’s slow rollout after they initially fell months behind schedule.
Covid-19 – Due Diligence And Asset Management
Stocks open lower, led by more weakness in tech companies
Brief: Stocks are opening lower again on Wall Street as the market extends a losing streak from last week. The S&P 500 was down 0.9% in the early going Monday. Technology companies were again doing worse than the rest of the market. That pulled the Nasdaq down 1.5%. Both indexes fell last week for the first time in four weeks. Twitter was in focus after mercurial Tesla billionaire Elon Musk said he wouldn’t be joining the company’s board after all. Musk recently became the company’s biggest shareholder and is now free to increase his stake.Global stock markets and Wall Street futures sank Monday after the Federal Reserve indicated it might raise interest rates more aggressively to cool U.S. inflation and President Emmanuel Macron emerged from the first round of France's election facing a challenge from the far right. London and Frankfurt opened lower. Shanghai, Tokyo and Hong Kong retreated. Oil fell more than $2 per barrel on concern global economic growth might weaken.
Oil slides on release of strategic reserves and China lockdowns
Brief: Oil prices dropped by more than $2 a barrel on Monday after a second straight weekly decline on plans to release record volumes of crude and oil products from strategic stocks and on continuing coronavirus lockdowns in China. Brent crude for June delivery was down $2.97, or 2.9%, at $99.78 a barrel. U.S. West Texas Intermediate crude lost $3.32, or 3.4%, to trade at $94.96. Bank of America maintained its forecast for Brent crude to average $102 a barrel for 2022-23, but it cut its summer spike price to $120. Swiss investment bank UBS also lowered its June Brent forecast by $10 to $115 a barrel. “The release of strategic government oil reserves should ease some market tightness over the coming months, reducing the need for oil prices to rise to trigger near-term demand destruction,” said UBS analyst Giovanni Staunovo.
Big Banks Set to Post Weaker Deal Revenue Amid Ukraine Chaos
Brief: Wall Street’s dealmaking boom came to an abrupt halt amid the war in Ukraine and a global shift toward rising interest rates, leaving big banks set to post a quarterly slump in investment-banking revenue. The record merger-and-acquisition pipelines bank executives touted at the start of 2022 are still on the horizon, but have been put on the back burner amid gyrating markets and rampant inflation, according to Barclays Plc analyst Jason Goldberg. “Many deals did not get launched given the market volatility throughout the quarter,” Goldberg said. “We do think pipelines remain strong and have just been more elongated than canceled.” Another pressure point is the Biden administration’s more-skeptical view of mega mergers. U.S. antitrust enforcers earlier this year announced an effort to toughen merger reviews, saying a new framework is needed to combat a surge in deals that threatens to worsen already high concentration across industries.
U.K. Economy Grew Less Than Expected as Manufacturing Slumped
Brief: The U.K. economy grew less than expected in February after industrial production and construction shrank. The 0.1% expansion followed a robust 0.8% gain in January, Office for National Statistics figures said Monday. Growth of 0.2% was forecast by economists. It left output 1.5% above its level in February 2020, before the pandemic struck. Manufacturing dropped unexpectedly, driven by shortages that held up output from carmakers. That reflects turmoil in global supply chains left over from the pandemic that’s likely to worsen with the war in Ukraine. Construction also fell in the month, driven solely by a decrease in repair and maintenance work. New business increased slightly. The rise in GDP, which reflected continued easing of coronavirus restrictions, leaves Britain on course for growth of around 1% in the first quarter. However, that may be a high-water mark, with soaring energy bills and inflation set to deliver an unprecedented hit to living standards this year.
Jobless rate falls to record low as economy adds 72,500 jobs in March, StatCan says
Brief: Canada's unemployment rate dropped to a record low last month as more people jumped into a hot labour market — and economists say the jobless rate could yet fall even lower. The March unemployment rate registered at 5.3 per cent, down from the 5.5 per cent recorded one month earlier as the economy added 72,500 jobs. Statistics Canada said Friday it was the lowest jobless rate since comparable data became available in 1976 and down from the previous low of 5.4 per cent in May 2019. It was also a turnaround from the early days of the pandemic in May 2020 when the unemployment rate hit a record 13.4 per cent. CIBC senior economist Andrew Grantham said oil-producing provinces like Alberta and Saskatchewan were not at full employment before the pandemic struck and may have space for more job gains.
